Operating result rose to more than 4.2 bln (+5.3%)

Transcription

1 13/03/2014 PRESS RELEASE GENERALI GROUP CONSOLIDATED RESULTS AS OF DECEMBER 31, Operating result rose to more than 4.2 bln (+5.3%) Net result bln ( 94 mln FY12), the highest of the last 6 years Dividend per share 0.45, more than doubled ( 0.20 FY12) Media Relations T press@generali.com Investor Relations T ir@generali.com Strong improvement in cash generation. Net Free Surplus up to 2.1 bln (+38%), already above the 2015 target Significant progress made towards 2015 targets: Operating RoE increased by 80 bps to 12.1% (2015 target: >13%) Solvency I ratio approximately 150% as of end of February, on track with the >160% 2015 target (141% FY13) Debt reduced by 500 mln with an 80 bp improvement of the debt leverage ratio to 39.6% (2015 target: <35%) Improved operating results in Life (+4.3%) and P&C (+3.5%). Stable premium income at 66 bln The Generali Group CEO, Mario Greco, said: 2013 has been a fundamental year for the turnaround of Generali and the results confirm that we are on track, or ahead, of the targets in our strategic plan. For the first time, after many years, our net result derives entirely from our business operations rather than being impacted by one-off items. During the year we have made deep changes to the Group. In particular, we have disposed of 2.4 billion of non-core assets and acquired minorities in strategic areas for 1.5 billion. We have strengthened the management structure and simplified the Group s governance, which is now in line with international best practice. Over 2013, we generated a total shareholder return of 26%. These results and the more than doubling of our dividend confirm we are on the right track. We are aware that a lot still needs to be done to reach the targets we set ourselves. In 2014 the debt will be reduced further and significant cost savings will be achieved. We estimate to improve the operating result and the net profit further, in line with the plan that aims to gradually increase the profitability for our shareholders. 1 Change in premiums, net inflows and APE is calculated on a like-for-like basis (on equivalent exchange rates and consolidation area). Changes in operating results and own investments are calculated excluding the disposed entities from the comparative period.

2 Milan At a meeting chaired by Gabriele Galateri di Genola, the Board of Directors of Generali has approved the consolidated financial statements and the parent company s draft financial statements for has been the first year of the Group s three-year turnaround plan during which Generali has taken steps towards the rebuilding of profitability and capital solidity. The Group has also re-focused on its core insurance business, through the disposal of non-core businesses and the investment to acquire full control of strategic activities. Furthermore, it has strengthened its governance by creating a simpler and more effective organization. The progress achieved over the year in the turnaround of the business allowed the Group to register a boost in profitability despite an uncertain economic recovery, low interest rates and high natural catastrophe losses. Generali closed the year with an operating result of 4,207 million (+5.3%; 3,994 mln FY12) reflecting growth in all the lines of business. These results helped Generali reach a net result of 1,915 million ( 94 mln FY12), derived entirely from operating performance, the highest of the last 6 years. Taking into account the proceeds of disposals and the gain on the Group s stake in the Bank of Italy 2 which have been offset by extraordinary negative impacts on Telco (- 189 mln), BSI (- 217 mln) and other items, the overall impact of these one-offs is broadly neutral. A dividend per share of 0.45, more than doubled relative to last year ( 0.20 FY12), will be proposed to shareholders at the AGM by the Board of Directors. The total dividend on outstanding shares will amount to 700,592, The dividend will be paid on May 22, 2014 and the record date will be May 21, Shares will trade ex-dividend as from May 19, In the Life business, premium income was stable at 45,115 million (+0.2%) with an improved business mix oriented towards products with higher margin. The new business contribution showed improved profitability with a New Business Margin at 21% (19.2% FY12), driving the significant rise in the operating result to 2,645 million (+4.3%). In the P&C business, premiums were broadly stable ( 20,940 mln; -0.6%) despite the challenging economic environment in some of the Group s core markets. The Combined Ratio improved further to 95.6% (-0.2 p.p.) despite natural catastrophes accounting for 2.3 percentage points (1.5 p.p. in 2012), leading to a growth of the operating result of 3.5% to 1,616 million. In the financial segment, third-party assets expanded by +3.8% to 104,346 mln supporting the 5.4% increase of the Group s total Assets Under Management to 508 billion. The operating result was up by 18.4% to 483 million. These results were supported by a solid capital position with a 4% increase in Generali s shareholders equity to 19,778 million over the year. 2 The gain on the stake in the Bank of Italy determined a pre-tax capital gain of 290 mln in the fourth quarter of The competent authorities have jointly communicated that further analysis is currently being carried out by the competent international bodies regarding the accounting method to be applied to this transaction in the financial reports that comply with IAS/IFSR and have suggested that the most complete information possible is given as far as the effects of the adopted method are concerned. The analysis by the competent international bodies might lead to a different interpretation of the accounting principles and, as a consequence, the above-mentioned capital gain might be booked as part of the shareholders equity instead of the income statement, without prejudice for the overall profitability.

3 SIGNIFICANT PROGRESS TOWARDS 2015 TARGETS The results show a significant progress towards the 2015 targets with an operating RoE which increased by 80 bp to 12.1% in line with the 2015 target of an operating RoE in excess of 13%. The Solvency I ratio as of end of February reached approximately 150%. The year-end ratio, at 141% (145% at the beginning of 2013), was principally impacted by the investments made to purchase the minorities and for approximately 3 p.p. the ineligibility of a 500 million subordinated hybrid loan issue at the end of During the third quarter of 2013, in relation to the upcoming introduction of the new prudential regulation for banks, Generali received a request by the lender to apply the increased cost contractual clause. In order to assess the bank s request, Generali carried out a thorough assessment of the contractual documentation. During the assessment, the Group verified that a contract gave the option to Generali to redeem the loan ahead of the contractual expiration date, subject to the approval of the Supervision Authority, and that in 2008, at the time of entering into the Loan, there was a failure to notify the Authority about this option contract. As a result, the Group has submitted to the Authority in a timely manner the full documentation relating to the loan. IVASS, following its auditing procedure, has resolved to disqualify the loan as part of the Group's eligible regulatory capital, effective from year-end Generali intends to repay this subordinated hybrid loan using existing resources and replace it with a suitable substitute capital instrument. This issue does not affect the Group's ability to achieve its 160% Solvency I target by The excellent business performance and the Group s strategy to support Life products with lower capital absorption enabled Generali to increase the Net Free Surplus significantly to 2.1 billion, thereby exceeding the 2015 target (> 2 bln). Furthermore, as per the new Group s strategy, new initiatives have been introduced to optimize the capital management, to the benefit of the Group s remittance ratio 3. During 2013, the reduction of approximately 500 million in the Group s debt contributed to the improvement of the debt leverage ratio 4 by approximately 1 percentage point to 39.6%. The interest coverage ratio the ratio between EBIT and interest expenses on financial debt benefitted as well and increased to 4.2x (+0.5x) against a 2015 target of approximately 7x. KPIs 31/12/ /12/2013 Δ 2015 target Operating RoE 11.3% 12.1% +0.8 pp >13% Net Free Surplus 1.5 bln 2.1 bln +38% > 2 bln Remittance ratio n.a. 70% n.a. 75% Debt leverage ratio 40.4% 39.6% -0.8 pp <35% Interest coverage ratio 3.6x 4.2x +0.5x app. 7x Solvency I 145% app. 150%* +5 pp >160% Non-core asset disposals n.a. 2.4 bln n.a. 4 bln * End of February The portion of the gross free surplus generated by the operating units and remitted to the Parent Company. 4 The ratio between the Group s financial debt and its shareholders equity, gross of minorities and excluding G/L in Other Comprehensive Income.

4 LIFE SEGMENT Operating result grew by 4.3% despite low interest rates Life net inflows almost tripled to 8.7 bln. Stable premium income at 45.1 bln (+0.2%). Focus on greater profitability drove the New Business Value to 937 mln (+14.2%) and Margin to 21% (19.2% FY12) The Group s premium income remained broadly stable at 45,115 million. The slight increase of 0.2% is attributable to the growth of the unit linked contracts (+8.8%), consistent with the strategy to prioritize lower capital absorption products, offsetting the slight contraction of savings (-2.6%) and protection covers (-0.4%). Germany, with 14,989 million of premiums (+4.7%), is the Group s largest market once again. Contributions from Italy (+8%), Asia (+24.2%) and LatAm (+17%) were very positive as well. In France, the 2013 premium income fell by 19% relative to 2012, when the Group registered the positive contribution of some extraordinary actions taken to preserve production against a substantial amount of maturing capital. Unit linked premiums, nevertheless, grew significantly by +34.3%. The slight fall in premiums in the CEE countries (-2.1%) was due to recent regulatory changes and uncertainties in the Polish and Czech pension sectors. Their impact was only partially offset by the growth of the unit linked premiums. The new business in terms of APE remained high at 4,470 million (-1%) with a small decrease of annual premiums (-1.9%) but a slight increase in single premiums (+0.4%) driven by the performance in Italy (+19.1%) and Germany (+19.4%). The New Business Value grew significantly to 937 million (+14.2%) with an improved profitability (NBM) at 21% (19.2% in 2012). The Life net inflows (i.e. premiums less payments) registered a strong growth to 8,702 million, almost three times last year s figure, due to the containment of surrenders and maturities and the healthy premium income. Life segment - Operating result mln 31/12/2013 Δ Italy 1, % France % Germany % CEE countries % EMEA % LatAm % Asia % International Operations % Total 2, %

5 P&C SEGMENT Excellent technical profitability sustained the operating result at more than 1.6 bln (+3.5%) despite a 460 mln impact from Nat Cat Combined Ratio improves further to 95.6% (-0.2 p.p.) even after higher Nat Cat impact of 2.3 p.p. Stable premium income to 20.9 bln (-0.6%) Natural catastrophes especially the floods and storms that hit France, Germany and the CEE countries from June to October had an impact equal to 460 million on the P&C operating result, or 2.3 p.p. on the Combined Ratio (1.5 p.p. FY12). Nevertheless, the improvement of the loss ratio (68.5%, -0.2 p.p.) and the steady expense ratio at 27.1% meant the overall Combined Ratio improved to 95.6% (-0.2 p.p.). Looking at the main markets, the Combined Ratio improved significantly in Italy to 92.4% (95.7% FY12), while France (+4.1 p.p.) and Germany (+1.2 p.p.) directly suffered from the Nat Cat impact. Central-Eastern Europe is once again a high-performing region in terms of technical profitability with a Combined Ratio at 88.8% (+0.3 pp). Premium income amounted to 20,940 million, a slight decrease of 0.6% that reflects the fall of the Non-Motor lines (-1.2%) due to the negative trend of the Corporate and Accident/Health sectors. The Motor lines posted a growth of +0.3%. Contribution from Germany was very positive (+4.8%) due to the favorable market conditions as well as the launch of new products. The strong pressure from competition and the prolonged negative economic context burdened the performance in Italy (-7.6%), France (-4.9%) and Spain (- 6.7%). P&C segment Operating result and CoR mln Operating result CoR 31/12/2013 Δ 31/12/2013 Δ Italy % 92.4% -3.3 pp France % 105.5% +4.1 pp Germany % 95.7% +1.2 pp CEE countries % 88.8% +0.3 pp EMEA % 95.8% -0.2 pp LatAm % 100.9% -1.7 pp Asia % 120.0% pp International Operations % 90.6% 0.0 pp Total 1, % 95.6% -0.2 pp FINANCIAL SEGMENT Operating result up by 18.4% to 483 mln As of December 31, 2013, the total third-party assets managed by the Group s banking and AM companies were 104,346 million ( 96,379 mln FY12), a 3.8% growth. The financial segment s operating result benefitted from both higher net commissions and net realized gains and increased by 18.4% to 483 million. The cost income ratio improved from 69% to 66.3% mostly due to the progress of the investment management.

6 OUTLOOK For 2014 the Group estimates a further improvement of the operating result and the net profit, in line with the three-year strategic plan, in spite of a still uncertain macroeconomic context. The Group s business strategy will continue to be based on customer retention and value, also through developments focused on the agency network and on strengthening the Group in multi-channel integrated distribution. In the Life segment, a selective underwriting policy will be oriented toward products with higher margin. In particular, protection coverage and unit linked products will be developed to maintain a stable Life production and good profitability. In the Property & Casualty segment, initiatives aimed to favour technical excellence among which sophisticated pricing techniques, product technological innovations and systems for optimizing claim management will result into an improvement of profitability SHAREHOLDERS MEETING *** The Board of Directors has called both the ordinary and the extraordinary Shareholders Meetings on April , The ordinary Meeting will resolve on: The approval of the Consolidated Annual Report as of December 31, 2013, the net result allocation and the dividend distribution; The appointment of the Board of Statutory Auditors and its Chairman and the definition of the Auditors annual remuneration; The appointment of a member of the Board of Directors; The approval of the Remuneration Report; The approval of the new 2014 Long Term Incentive Plan to the benefit of the Group CEO and the Company or Group managers. The Plan has the purpose of strengthening the link between the variable component of remuneration which relates to medium-long term goals and the creation of value for shareholders, with regard to Group sustainability and achieved goals; The authorization to purchase and dispose a maximum of 7 million treasury shares in accordance to the Long Term Incentive Plan. The authorization is requested for a period of 18 months from the date of the adoption of the Meeting resolution. The minimum price of the shares shall not be lower than its nominal value ( 1), while the maximum price shall not be more than 5% higher than the reference price of the stock on the day before each single purchase transaction. Purchases of treasury shares will be made in compliance with article 144-bis, paragraph 1, letters b) and c) of the Issuers Regulations, according to the operating procedures defined by the markets organizational and management regulations, in order to ensure an equal treatment among shareholders. The extraordinary Meeting will resolve on the proposal to delegate to the Board of Directors a free and divisible capital increase in accordance to the new Long Term Incentive Plan to a maximum of 7 million, for a period of 5 years from the date of the Meeting. Please note that up to this date the Company and its subsidiaries currently own 593,582 Generali shares, equal to 0.038% of the Company s share capital. *** Finally, the Board of Directors approved the 2013 Annual Report on corporate governance and ownership structure, which will be made available in accordance with the terms and

7 modalities prescribed by law. The full text of the proposals for resolution and the Board of Directors reports on the subjects of the agenda, together with the complete related documentation, will be made available at the Company s legal office, as well as on the Company s website and on the website of Borsa Italiana Spa ( according to the terms and modalities prescribed by law. The Manager in charge of preparing the company s financial reports, Alberto Minali, declares, pursuant to paragraph 2 article 154 bis of the Consolidated Law on Finance, that the accounting information in this press release corresponds to the document results, books and accounting entries. THE GENERALI GROUP The Generali Group is one of the largest global insurance providers with 2013 total premium income of 66 billion. With 77,000 employees worldwide serving 65 million clients in more than 60 countries, the Group occupies a leadership position on West European markets and an increasingly important place on markets in Central Eastern Europe and Asia. NOTE TO EDITORS From 7:30 (CET) the following documents are available on press release, pre-recorded video and related transcript, analyst presentation and consolidated annual report. The analyst call is scheduled at 12:00 (CET). The Group CEO Mario Greco and the Group CFO Alberto Minali will take part to the call. Editors can follow the event dialling (listen only). Generali Corporate app provides the latest optimized package of institutional info for mobile device users. Download it free from the Apple and Android stores. Index of attachments: 1. Group s Balance Sheet and Income Statement 2. Parent company s Balance Sheet and P&L account

8 1. Group s Balance Sheet and Income Statement BALANCE SHEET - ASSETS ( million) 31/12/ /12/2012 R 01/01/2012 R 1 INTANGIBLE ASSETS 9,352 9,902 10, Goodwill 7,163 7,222 7, Other intangible assets 2,189 2,681 3,039 2 TANGIBLE ASSETS 4,786 5,018 4, Land and buildings (self used) 2,879 3,002 3, Other tangible assets 1,907 2,016 1,835 3 AMOUNTS CEDED TO REINSURERS FROM INSURANCE PROVISIONS 4,875 5,624 5,678 4 INVESTMENTS 384, , , Land and buildings (investment properties) 12,828 12,899 13, Investments in subsidiaries, associated companies and joint ventures 1,407 1,692 1, Held to maturity investments 4,115 7,538 5, Loans and receivables 63,371 71,063 77, Available for sale financial assets 230, , , Financial assets at fair value through profit or loss 72,893 68,423 73,670 of which financial assets where the investment risk is borne by the policyholders and related to pension funds 59,116 53,842 58,312 5 RECEIVABLES 10,915 11,143 11, Receivables arising out of direct insurance operations 7,584 8,230 8, Receivables arising out of reinsurance operations 1, , Other receivables 2,249 1,938 2,048 6 OTHER ASSETS 15,651 14,603 18, Non-current assets or disposal groups classified as held for sale Deferred acquisition costs 1,957 2,323 2, Deferred tax assets 2,807 2,624 6, Tax receivables 2,866 2,686 2, Other assets 7,368 6,956 6,825 7 CASH AND CASH EQUIVALENTS 19,431 21,647 25,560 TOTAL ASSETS 449, , ,148 ( R ) Some data shown in the comparative columns of the financial statements do not correspond to those published in 2012 in the Consolidated Financial Statements as restated as described in the section Changes in accounting policies and changes in the presentation of the financial statements.

9 BALANCE SHEET SHAREHOLDERS EQUITY AND LIABILITIES ( million) 31/12/ /12/2012 R 01/01/2012 R 1 SHAREHOLDERS' EQUITY 21,405 21,726 17, Shareholders' equity attributable to the Group 19,778 19,013 15, Share capital 1,557 1,557 1, Other equity instruments Capital reserves 7,098 7,098 7, Revenue reserves and other reserves 7,275 8,591 8, (Own shares) Reserve for currency translation differences Reserve for unrealized gains and losses on available for sale financial assets Reserve for other unrealized gains and losses through equity 2,513 2,482 2, , Result of the period 1, Shareholders' equity attributable to minority interests 1,627 2,713 2, Share capital and reserves 1,434 2,308 2, Reserve for unrealized gains and losses through equity Result of the period OTHER PROVISIONS 1,768 1,471 1,386 3 INSURANCE PROVISIONS 345, , ,981 of which insurance provisions for policies where the investment risk is borne by the policyholders and related to pension funds 45,809 41,068 46,850 4 FINANCIAL LIABILITIES 62,016 63,907 59, Financial liabilities at fair value through profit or loss of which financial liabilities where the investment risk is borne by the policyholders and related to pension funds 16,084 15,553 15,502 13,227 12,602 11, Other financial liabilities 45,932 48,354 43,631 of which subordinated liabilities 7,612 7,833 6,611 5 PAYABLES 8,129 8,033 7, Payables arising out of direct insurance operations 3,190 3,314 3, Payables arising out of reinsurance operations Other payables 4,367 4,073 3,303 6 OTHER LIABILITIES 10,586 10,504 12, Liabilities directly associated with non-current assets and disposal groups classified as held for sale Deferred tax liabilities 2,338 2,996 5, Tax payables 1,607 1,639 1, Other liabilities 5,993 5,869 4,944 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 449, , ,148

10 Consolidated Financial Statements - Assicurazioni Generali 3 INCOME STATEMENT ( million) 31/12/ /12/2012 R 1.1 Net earned premiums 60,796 60, Gross earned premiums 62,726 62, Earned premiums ceded 1,930 2, Fee and commission income and income from financial service activities 1,359 1, Net income from financial instruments at fair value through profit or loss 4,763 6,143 of which net income from financial instruments where the investment risk is borne by the policyholders and related to pension funds 4,103 4, Income from subsidiaries, associated companies and joint ventures Income from other financial instruments and land and buildings (investment properties) 15,613 15, Interest income 10,024 9, Other income 1,891 1, Realized gains 3,486 3, Unrealized gains and reversal of impairment losses Other income 2,332 2,113 1 TOTAL INCOME 85,043 86, Net insurance benefits and claims 63,295 61, Claims paid and change in insurance provisions 64,433 62, Reinsurers' share 1,137 1, Fee and commission expenses and expenses from financial service activities Expenses from subsidiaries, associated companies and joint ventures Expenses from other financial instruments and land and buildings (investment properties) 3,299 7, Interest expense 1,377 1, Other expenses Realized losses 514 2, Unrealized losses and impairment losses 964 3, Acquisition and administration costs 11,036 11, Commissions and other acquisition costs 7,976 8, Investment management expenses Other administration costs 2,986 3, Other expenses 4,249 3,322 2 TOTAL EXPENSES 82,720 84,550 EARNINGS BEFORE TAXES 2,323 1,468 3 Income taxes 742 1,154 EARNINGS AFTER TAXES 1, RESULT OF DISCONTINUED OPERATIONS CONSOLIDATED RESULT OF THE PERIOD 2, Result of the period attributable to the Group 1, Result of the period attributable to minority interests EARNINGS PER SHARE: Earnings per share (in ) from continuing operation Diluted earnings per share (in ) from continuing operation

11 2. Parent company s Balance Sheet and P&L account BALANCE SHEET ASSETS Year 2013 A. SUBSCRIBED CAPITAL UNPAID 0 0 of which called-up capital 0 B. INTANGIBLE ASSETS 1. Acquisition commissions to be amortised a) life business 0 b) non-life business Other acquisition costs 0 3. Formation and development expenses 0 4. Goodwill 0 5. Other intangible assets 21,627,644 21,627, ,678,520 C. INVESTMENTS I II Land and Buildings 1. Property used for own activities 7,160, Property used by third parties 292,061, Other properties 0 4. Other realty rights 0 5. Assets in progress and payments on account 996, ,219,465 Investments in affiliated companies and other shareholdings 1. Interests in a) parent companies 0 b) affiliated companies 27,034,271,242 c) affiliates of parent companies 0 d) associated companies 301,123,833 e) other 58,053,224 27,393,448, Debt securities issued by a) parent companies 0 b) affiliated companies 1,476,593 c) affiliates of parent companies 0 d) associated companies 0 e) other 26,292,121 27,768, Loans to a) parent companies 0 b) affiliated companies 4,742,454 c) affiliates of parent companies 0 d) associated companies 0 e) other 0 4,742,454 27,425,959,467

12 C. INVESTMENTS (follows) Year 2013 III Other financial investments 1. Equities a) quoted shares 20,439,402 b) unquoted shares 56,224,152 c) other interests 8,575,226 85,238, Shares in common investment funds 114,721, Debt securities and other fixed-income securities a) quoted 1,284,365,388 b) unquoted 49,891,139 c) convertible bonds 25,398,234 1,359,654, Loans a) mortgage loans 0 b) loans on policies 720,769 c) other loans 1,658,733 2,379, Participation in investment pools 0 6. Deposits with credit institutions 53,062, Other 0 1,615,056,757 IV Deposits with ceding companies 8,281,710,938 37,622,946,627 65,895,772,036 D. INVESTIMENTS FOR THE BENEFIT OF LIFE-ASSURANCE POLICYHOLDERS W HO BEAR THE INVESTMENT RISK AND RELATING TO THE ADMINISTRATION OF PENSION FUNDS I - Investiments relating to contracts linked to investments funds and market index 79,754,143 II - Investiments relating to the administration of pension funds 0 79,754,143 1,242,847,583 D.bis REINSURANCE AMOUNTS OF TECHNICAL PROVISIONS I NON-LIFE INSURANCE BUSINESS 1. Provision for unearned premiums 75,352, Provision for claims outstanding 494,841, Provision for profit sharing and premium refunds 0 4. Other technical provisions 0 570,193,366 II - LIFE INSURANCE BUSINESS 1. Mathematical provision 13,906, Unearned premium provision for supplementary coverage 9,000, Provision for claims outstanding 190,073, Provision for profit sharing and premium refunds 1,039, Other provisions 0 6. Provisions for policies where the investment risk is borne by the policyholders and relating to the administration of pension funds 0 214,021, ,214,390 1,654,907,139

13 Year 2013 E. DEBTORS I II Debtors arising out of direct insurance operations 1. Policyholders a) for premiums - current year 73,853,653 b) for premiums - previous years 15,266,957 89,120, Insurance intermediaries 18,609, Current accounts with insurance companies 9,924, Policyholders and third parties for recoveries 10,408, ,062,472 Debtors arising out of reinsurance operations 1. Reinsurance companies 393,520, Reinsurance intermediaries 4,298, ,819,251 III - Other debtors 857,334,928 1,383,216,651 3,181,463,433 F. OTHER ASSETS I II - Tangible assets and stocks 1. Furniture, office equipment, internal transport vehicles 2,146, Vehicles listed in public registers 52, Equipment and appliances 0 4. Stocks and other goods 259,542 2,458,614 - Cash at bank and in hand 1. Bank and postal deposits 651,202, Cheques and cash in hand 322, ,525,118 III - Own shares 2,995,682 IV - Other 1. Deferred reinsurance items 9,415, Miscellaneous assets 44,344,294 53,759, ,739,041 1,397,630,810 G. PREPAYMENTS AND ACCRUED INCOME 1. Interests 26,393, Rents 370, Other prepayments and accrued income 212,774, ,539, ,405,628 TOTAL ASSETS 40,842,037,755 74,115,705,149

14 BALANCE SHEET LIABILITIES AND SHAREHOLDERS' FUNDS Year 2013 A. SHAREHOLDERS' FUNDS I - Subscribed capital or equivalent funds 1,556,873,283 II - Share premium account 3,568,250,216 III - Revaluation reserve 2,010,834,652 IV - Legal reserve 311,374,657 V - Statutory reserve 0 VI - Reserve for own shares 2,995,682 VII - Other reserve 6,644,653,322 VIII - Profit or loss brought forward 0 IX - Profit or loss for the financial year 569,364,156 14,664,345,968 14,405,470,595 B. SUBORDINATED LIABILITIES 4,930,288,462 6,154,643,385 C. TECHNICAL PROVISIONS I - NON-LIFE INSURANCE BUSINESS 1. Provision for unearned premiums 281,875, Provision for claims outstanding 1,840,005, Provision for profit sharing and premium refunds 0 4. Other provisions 2, Equalisation provision 44,173 2,121,926,797 II - LIFE INSURANCE BUSINESS 1. Mathematical provision 8,410,633, Unearned premium provision for supplementary coverage 24,339, Provision for claims outstanding 839,594, Provision for profit sharing and premium refunds 97,818, Other provisions 13,268,096 9,385,654,050 11,507,580,847 42,287,291,615 D. PROVISIONS FOR POLICIES WHERE THE INVESTMENT RISK IS BORNE BY THE I POLICYHOLDER AND RELATING TO THE ADMINISTRATION OF PENSION FUNDS - Provisions relating to contracts linked to investments funds and market index 76,065,691 II - Provisions relating to the administration of pension funds 0 76,065,691 1,237,941,668

15 Year 2013 E. PROVISIONS FOR OTHER RISKS AND CHARGES 1. Provision for pensions and similar obligations 0 2. Provisions for taxation 95,392, Other provisions 50,593, ,986,083 35,709,355 F. DEPOSITS RECEIVED FROM REINSURERS 207,867, ,188,503 G. CREDITORS I II - Creditors arising out of direct insurance operations 1. Insurance intermediaries 9,351, Current accounts with insurance companies 2,469, Premium deposits and premiums due to policyholders 6,075, Guarantee funds in favour of policyholders 0 17,896,367 - Creditors arising out of reinsurance operations 1. Reinsurance companies 178,049, Reinsurance intermediaries 15,456, ,506,028 III - Debenture loans 2,947,193,505 IV - Amounts owed to credit institutions 50,627,560 V - Loans guaranteed by mortgages 0 VI - Other financial liabilities 4,737,738,110 VII - Provisions for severance pay 5,130,854 VIII - Other creditors 1. Premium taxes 3,515, Other tax liabilities 70,383, Social security 4,531, Sundry creditors 356,412, ,843,495 IX - Other liabilities 1. Deferred reinsurance items 10,850, Commissions for premiums in course of collection 10,033, Miscellaneous liabilities 517,124, ,008,218 8,924,944,137 9,279,420,120

16 Year 2013 H. ACCRUALS AND DEFERRED INCOME 1. Interests 263,487, Rents 1,523, Other accruals and deferred income 119,948, ,959, ,039,908 TOTAL LIABILITIES AND SHAREHOLDERS' FUNDS 40,842,037,755 74,115,705,149 BALANCE SHEET GUARANTEES, COMMITMENTS AND OTHER EVIDENCE ACCOUNTS Year 2013 GUARANTEES, COMMITMENTS AND OTHER EVIDENCE ACCOUNTS I Guarantees issued 1. Fidejussions 5,669,033,737 5,419,806, Endorsements Other personal guarantees Guarantees secured by mortgages 754,291 0 II - Guarantees received 1. Fidejussions 4,597,766 4,510, Endorsements Other personal guarantees Guarantees secured by mortgages 0 0 III - Guarantees issued by third parties in the interest of the Company 0 0 IV - Commitments 3,048,789,183 5,375,503,841 V - Assets deposited with the Company 87,209,566 94,635,083 VI - Assets relating to pension funds managed in the name and on account of third parties 0 1,533,845,675 VII - Securities deposited with third parties 5,631,584,237 30,678,526,056 VIII - Other evidence accounts 1,058, ,136

17 PROFIT AND LOSS ACCOUNT I. TECHNICAL ACCOUNT - NON-LIFE INSURANCE BUSINESS Year EARNED PREMIUMS, NET OF REINSURANCE: a) Gross premiums written 2,770,479,618 b) (-) Outward reinsurance premiums 674,842,539 c) Change in the gross provision for unearned premiums -78,167,957 d) Change in the provision for unearned premiums, reinsurers' share -19,922,236 2,153,882,800 3,429,981, (+) ALLOCATED INVESTMENT RETURN TRANSFERRED FROM THE NON-TECHNICAL ACCOUNT (ITEM III. 6) 160,394, ,053, OTHER TECHNICAL INCOME, NET OF REINSURANCE 30,979,662 58,718, CLAIMS INCURRED, NET OF RECOVERIES AND REINSURANCE a) Claims paid aa) Gross amount 2,011,612,683 bb) (-) Reinsurers' share 355,466,525 1,656,146,158 b) Recoveries net of reinsurance aa) Gross amount 50,511,166 bb) (-) Reinsurers' share 162,358 50,348,808 c) Change in the provision for claims outstanding aa) Gross amount -112,960,957 bb) (-) Reinsurers' share -15,850,088-97,110,869 1,508,686,481 2,495,338, CHANGE IN OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE 363, , PREMIUM REFUNDS AND PROFIT SHARING, NET OF REINSURANCE 1,178,898 3,905, OPERATING EXPENSES a) Acquisition commissions 308,101,368 b) Other acquisition costs 58,652,554 c) Change in commissions and other acquisition costs to be amortised 0 d) Collecting commissions 59,764,993 e) Other administrative expenses 105,679,379 f) (-) Reinsurance commissions and profit sharing 75,717, ,480, ,097, OTHER TECHNICAL CHARGES, NET OF REINSURANCE 66,282,296 97,131, CHANGE IN THE EQUALISATION PROVISION 352,703 1,336, BALANCE ON THE TECHNICAL ACCOUNT FOR NON-LIFE BUSINESS 311,912, ,079,775

18 II. TECHNICAL ACCOUNT - LIFE ASSURANCE BUSINESS Year PREMIUMS WRITTEN, NET OF REINSURANCE a) Gross premiums written 3,530,035,986 b) (-) Outward reinsurance premiums 268,127,480 3,261,908,506 5,302,086, INVESTMENT INCOME: a) From partecipating interests 242,837,397 (of which, income from Group companies 213,145,706 ) b) From other investments aa) income from land and buildings 0 bb) from other investments 1,009,015,548 (of which, income from Group companies 1,009,015, ,287,259 ) c) Value re-adjustments on investment 7,309,306 d) Gains on the realisationof investments 148,180,109 (of which, income from Group companies 0 ) 1,407,342,360 2,330,406, INCOME AND UNREALISED GAINS ON INVESTMENTS FOR THE BENEFIT OF POLICYHOLDERS W HO BEAR THE INVESTMENT RISK AND ON INVESTMENT RELATING TO THE ADMINISTRATION OF PENSION FUNDS 97,419, ,888, OTHER TECHNICAL INCOME, NET OF REINSURANCE 28,040,923 26,671, CLAIMS INCURRED, NET OF REINSURANCE a) Claims paid aa) gross amount 3,651,635,688 bb) (-) reinsurers' share 189,249,679 3,462,386,009 b) Change in the provision for claims outstanding aa) gross amount 77,350,244 bb) (-) reinsurers' share 25,250,927 52,099,317 3,514,485,326 5,787,212, CHANGE IN THE PROVISION FOR POLICY LIABILITIES AND IN OTHER TECHNICAL PROVISIONS, NET OF REINSURANCE a) Provisions for policy liabilities aa) gross amount -58,391,195 bb) (-) reinsurers' share 12,344,752-70,735,947 b) Change in the provision for claims outstanding aa) gross amount -1,496,767 bb) (-) reinsurers' share 1,259,057-2,755,824 c) Other provisions aa) gross amount -1,768,852 bb) (-) reinsurers' share 0-1,768,852 d) Provisions for policies where the investment risk is borne by the shareholders and relating to the administration of pension funds aa) gross amount 46,215,631 bb) (-) reinsurers' share 0 46,215,631-29,044,992 75,758,407

19 Year PREMIUM REFUNDS AND PROFIT-SHARING, NET OF REINSURANCE 68,468,503 98,385, OPERATING EXPENSES a) Acquisition commissions 309,379,811 b) Other acquisition costs 45,728,895 c) Change in commissions and other acquisition costs to be amortised 0 d) Collecting commissions 9,316,027 e) Other administrative expenses 67,143,532 f) (-) Reinsurance commissions and profit sharing 44,766, ,801, ,383, INVESTMENT CHARGES a) Investment administration charges, including interest 130,110,044 b) Value adjustments on investments 76,177,944 c) Losses on the realisation of investments 25,105, ,393, ,169, EXPENSES AND UNREALISED LOSSES ON INVESTMENTS FOR THE BENEFIT OF POLICYHOLDERS W HO BEAR THE INVESTMENT RISK AND ON INVESTMENT RELATING TO THE ADMINISTRATION OF PENSION FUNDS 65,363,414 60,376, OTHER TECHNICAL CHARGES, NET OF REINSURANCE 20,542,763 33,375, (-) ALLOCATED INVESTMENT RETURN TRANSFERRED TO THE NON-TECHNICAL ACCOUNT (item III. 4) 357,276, ,786, BALANCE ON THE TECHNICAL ACCOUNT FOR LIFE BUSINESS (item III.2) 179,424, ,605,062 III. NON TECHNICAL ACCOUNT 1. BALANCE ON THE TECHNICAL ACCOUNT FOR NON-LIFE BUSINESS (Item I.10) 311,912, ,079, BALANCE ON THE TECHNICAL ACCOUNT FOR LIFE BUSINESS (Item I.13) 179,424, ,605, NON-LIFE INVESTMENT INCOME a) From partecipating interests 617,491,714 (of which, income from Group companies 604,672,210 ) b) From other investments aa) income from land and buildings 17,616,601 bb) from other investments 93,425,105 (of which, income from Group companies 111,041,706 1,999,290 ) c) Value re-adjustments on investment 3,071,069 d) Gains on the realisationof investments 64,386,297 (of which, income from Group companies 9,890 ) 795,990, ,859,897

20 Year (+) ALLOCATED INVESTMENT RETURN TRANSFERRED FROM THE LIFE TECHNICAL ACCOUNT (item ii. 2) 357,276, ,786, INVESTMENT CHARGES FOR NON-LIFE BUSINESS a) Investment administration charges, including interest 76,140,907 b) Value adjustments on investments 146,118,446 c) Losses on realisation of investments 3,540, ,799, ,841, (-) ALLOCATED INVESTMENT RETURN TRANSFERRED TO THE NON-LIFE TECHNICAL ACCOUNT (item I. 2) 160,394, ,053, OTHER INCOME 147,427, ,068, OTHER CHARGES 1,455,205,119 1,270,479, RESULT FROM ORDINARY ACTIVITY -49,367, ,026, EXTRAORDINARY INCOME 572,975, ,474, EXTRAORDINARY CHARGES 76,107, ,850, EXTRAORDINARY PROFIT OR LOSS 496,868,318-45,376, RESULT BEFORE TAXATION 447,500, ,649, INCOME TAXES -121,863,215 88,985, PROFIT (LOSS) FOR THE YEAR 569,364, ,664,166